Impact in Action
Reduction of greenhouse gas emissions is a current topic in many corporate boardrooms. Within the energy-intensive steel industry, responsible for approximately 8% of global emissions, these discussions are both critically important and inherently difficult. The industry has long been a powerful symbol of industrial growth and yet is also a poster child of dirty industrial processes.
US Steel’s proposed merger with Nippon Steel has been in the news for other reasons, but both companies are pressing forward with efficiency and emissions reduction efforts. Globally the picture is mixed, but advancements and innovation in developed economies like the United States provide a template for the long-term goal of net-zero steel production.
The Path to Sustainable Steel
In the early 20th century, the steel industry began to use electric arc furnaces to supplement coke-fired blast furnaces. Fast forward to the present, and 43% of in-place and planned steelmaking capacity is based on electric arc technology, which is a big jump from 33% just a few years ago. Outside the US, continuing investments in older coal-based technology in China and India are threatening the ability to achieve net-zero goals even by 2060. China is now the largest producer (and exporter) of steel, creating more capacity than there is current global demand.
The US is one of the countries that has made the most progress towards the newer and lower-carbon technology to reduce Scope 1 and 2 emissions. Energy use in steel production has been reduced by 60% over the last 50 years, primarily by shifting from traditional blast furnaces (BF) to electric arc furnaces (EAF). Nonetheless, steel production facilities have very long lead times for construction, making new innovations harder to incorporate and finance.
Forever Steel
Steel is a key industrial material, with innovative technology dramatically transforming the historic process of forging cast iron and wrought iron to using blast furnaces as a means to produce great quantities of much stronger steel. Blast furnaces created heavy emissions, but perhaps ironically, they also allowed the use of a substantial quantity of scrap steel in the production process. Logistically, steel is easily sorted from other materials in the waste stream, and repeated recycling does not degrade its quality.
Unlike many rapidly industrializing economies (including China and India), the US has accumulated a century’s worth of scrap steel. The US became the global leader in steel production around 1920 to meet the production demands for the rapid expansion of rail, skyscrapers, bridges, and defense infrastructure. US Steel was an early leader, becoming a symbol of the dominance of the steel industry in the United States. Along with other top companies, they benefit from the dramatic “inventory” of scrap steel that has accumulated from both industrial and consumer use.
Steel is the most recycled material in the US, and ensuring a steady supply of quality scrap provides a competitive advantage when using these more sustainable processes. Overall, US production is currently 70% scrap-fed, with US Steel and rival Nucor recycling over 5.2 metric tons and 20.8 metric tons of scrap steel in 2023, respectively. Car bodies, refrigerators, water heaters – scrap metal is plucked from junkyards, and much of it is sold directly to the steel industry. Steel products produced by Nucor average 62-96% recycled content, with the majority of that coming from post-consumer recycling.
US Steel’s efforts are led by its 100% scrap-fed electric arc furnace mill in Alabama and its LEED-certified Big River mill in Arkansas. These modern steel mills use significantly less water in the production process and produce steel specifically targeted for electric car production. Automakers currently account for 12% of global steel use, and electric car production relies on “green steel” to meet growing demand as well as their sustainability pledges.
Demand Becomes Part of the Equation
Demand from population growth and technological innovation is intersecting with the societal need for reduced carbon emissions and related climate considerations. Current companies are shifting production to take advantage of opportunities and meet the growing demand, but more sustainable capacity needs to be built.
In order to better measure the benefits of green steel versus traditional high-emission steel, more tracking is required via carbon accounting, product certifications, and standards/definition setting.[1] Measuring What Matters is a familiar theme, helping create the policy scaffolding that increases productivity and communicates progress as global companies seek to meet the rising demand for green steel.
Resources:
[1] Steel industry makes ‘pivotal’ shift towards lower-carbon production. CarbonBrief.
